In recent weeks Crypto.IQ has posted many articles about the increasing level of insanity in the Decentralized Finance (DeFi) sector. Over and over poorly built projects are bringing in hundreds of millions of dollars of investment, only to crash soon afterwards. It started with YAM, and progressed to Spaghetti Money, MEME, and SushiSwap

Due to the massive and un-earned success of projects like YAM, now DeFi projects are just getting outright lazy and absurd, and still pulling in big bucks before the inevitable crash.

The latest DeFi pump and dump was Hotdog, which was basically a clone of Uniswap, similar to SushiSwap, where liquidity providers can earn Hotdog tokens. Hotdog offered one million percent yearly interest, which should have been a red flag, but many people jumped on the Hotdog train anyways. 

Hotdog rallied from an opening price of $500 to over $5,000, before completely collapsing to zero in just 5 minutes. This entire saga happened over the course of just a few hours. 

Basically, this works like a classic pump and dump where a group of people pushes up the price and creates a speculative frenzy, while quickly earning some Hotdog interest, and then they dump all at once, crashing the market. In the end a handful of people reap major profits, and everyone else loses. 

Hotdog also has tinges of a ponzi scheme since it promises such massive profits, only for all of the money to disappear soon after launching. More than anything, DeFi tokens like Hotdog are reminiscent of the latter stages of the initial coin offering (ICO) boom, where there were plenty of pump and dump cryptos just like Hotdog. 

Notably, not only was there a crazy Hotdog pump and dump in the past day, but other lazy and worthless tokens including ‘Pizza’ and ‘Onylup’ saw similar violent pump and dumps. 

Basically, it’s become a free for all in DeFi, where scammers are launching worthless projects and getting rich quick. As Crypto.IQ has warned many times, this cannot go on forever, and investment scams like ‘Hotdog’ will eventually lead to a powerful government crackdown on the entire DeFi space.